DISTRICT COURT, CITY & COUNTY OF DENVER, STATE OF COLORADO

Court Address: 1437 Bannock Street
Denver, CO 80209
Clerk of Division 9: (720) 865-8612
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Plaintiff: Lion Capital, L.L.C., a Colorado Limited Liability Company
v.
Defendants: Avatar Industries, Inc., d/b/a Thrivex.Com; et alia, and Including:
MBA Financial Group, Inc. misnamed in Plaintiff’s caption as “MBA Financial Group, d/b/a MBA Financial.Com,” and Dale Finney, individually.
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Attorney for Defendants MBA Financial Group, Inc., and “MBA Financial Group” d/b/a “MBA Financial.Com” (corporate Defendant’s “U.R.L.”) and Dale Finney, individually:
Timothy J. Essling, Esq.
50 So. Steele Street, #260
Denver, CO 80209
Phone: (303) 331-0055 Fax: (303) 331-0492
Atty. Reg. #: 12785
Attorney for Plaintiff Lion Capital, L.L.C.:
Andrew L. Quiat, Esq.
8200 So. Quebec Street, Suite A-3185
Englewood, CO 80112
Phone: (303) 471-8558 Fax: (303) 471-8561 / Case Number:

03 CV 5863

Div.: 9
MOTION TO DISMISS

COME NOW DEFENDANTS MBA FINANCIAL GROUP, INC. AND DALE FINNEY, INDIVIDUALLY (hereinafter, “MBA” and “Finney”), pursuant to C.R.C.P. 12(b)(5), move this Honorable Court to dismiss the claims against said Defendants, and to award attorneys fees and costs, herein. In support of this MOTION, Defendants attach a BRIEF IN SUPPORT OF MOTION TO DISMISS, and aver as follows:

1.  Plaintiff, as an assignee of Fashion Carpet, and other assignors, has filed claims against Defendants MBA and Finney, and dozens of other Defendants, alleging, inter alia, that Defendants MBA & Finney sent or caused to be sent ONE fax (Plaintiff’s Exhibit #8) which constitutes two distinct violations of 47 U.S.C 227(b)(1)(C). See Complaint ¶¶ 9.1 – 9.5.

2.  Plaintiff, as an assignee, is requesting $500.00 for each of two violations of 47 U.S.C. 227(b)(3), plus treble damages of $1,000.00 for each of those violations found to be knowing or willful. See Complaint ¶ 20.7.

3.  Although Plaintiff does not allege that Plaintiff received even one unsolicited fax, and does not allege that Defendant(s) are still engaged in fax dissemination, Plaintiff, without any standing to do so, further requests injunctive relief. See Complaint, ¶ 20.12.

4.  For the purpose of this Motion to Dismiss, Defendants know that the Court assumes that all factual allegations in the COMPLAINT are true and correct. Even under that assumption, Plaintiff fails to state a claim for which relief can be granted.

5.  The fatal flaws in Plaintiff’s Complaint are as follows:

a.  The Colorado Consumer Protection Act, C.R.S. 6-1-702 (hereinafter, “C.C.P.A.”), pre-empted the T.C.P.A. in 1999 (see ORDER of Denver District Court Judge Martin Egelhoff, July 26, 2004, attached to Brief as Exhibit A). Under Judge Egelhoff’s thoughtful analysis, the District Court “… lacks jurisdiction to address Plaintiff’s claim.” Those claims addressed by Judge Egelhoff are precisely parallel to the claims presented, herein.

b.  MBA & Finney had tailored their fax materials to comply with the C.C.P.A., by including the identifying information required, and a toll-free number by which the recipients could remove their fax number from the fax database. Plaintiff’s Exhibit 8 states on its face: “This is a legal fax per CO Statute C.S.R.A. 6-1-702.”

c.  Even if jurisdictional issues do not foreclose T.C.P.A. claims in Colorado, private rights of action under 47 U.S.C. 227(b)(3) are statutory penalties and as such cannot be assigned under either Federal or Colorado law (see ORDER of Judge Goldberger, attached to Brief as Exhibit B).

d.  Even if jurisdictional issues do not foreclose T.C.P.A. claims in Colorado, private rights of action under 47 C.F.R. 68.318(d) are statutory penalties and as such cannot be assigned under either Federal or Colorado law.

e.  Assignment of such claims to third party has the effect of denying Defendants’ right of confrontation, and results in the absence of a real party in interest.

f.  There is no private right of action pursuant to 47 C.F.R. 68.318(d).

g.  If the Court finds that there is a private right of action pursuant to 47 C.F.R. 68.318(d), then the claim still fails because 47 C.F.R. 68.318(d) is an unconstitutional abridgement of Defendants Due Process rights and right to commercial speech under the United States Constitution.

h.  If the Court finds that private right of action pursuant to 47 U.S.C. 227(b)(3) can be assigned, then the claim still fails because 47 U.S.C. 227(b)(1)(3), as sought to be applied, herein, is an unconstitutional abridgement of Defendants Due Process rights under the United States Constitution.

i.  Last but certainly not least, the statute of limitations has run on both the underlying claims and the treble damage claims under Colorado law.

6.  At the heart of this MOTION TO DISMISS is the threshold question of jurisdiction, which is addressed by Judge Egelhoff (see attached Brief, and Exhibit A, thereto). Judge Egelhoff’s analysis of the interaction of federal and state law reaches the inescapable conclusion that the Colorado legislature, with full knowledge of the terms and provisions of the T.C.P.A., decided to enact an alternative scheme. The Colorado legislature imposed upon the recipients of unsolicited fax transmissions the modest duty to help themselves, and mitigate their damages, by de-listing their numbers from the fax database. In the vast, arid landscape of the T.C.P.A. litigation, neither Defendant herein, nor their counsel, have ever heard an allegation that any recipient has sought to remove their number from the fax-vendors’ database.

PRAYER FOR LEGAL FEES AND COSTS:

7.  MBA ASSERTS A CLAIM FOR ATTORNEYS FEES AND COSTS: With regard to Plaintiff Lion Capital’s instant claims against MBA Financial Group, there are several important factors, and three discrete statutory provisions, that mitigate for an award of attorneys’ fees in favor of Defendants, herein. The statutory provisions include:

a.  The Colorado Consumer Protection Act, C.R.S. 6-1-702 et seq., under which Plaintiff Lion Capital, L.L.C. claims damages (see ¶¶3.1 and 3.2 of Plaintiff’s COMPLAINT),provides for an award of attorney fees in favor of an aggrieved consumer who prevails under the Act. Certainly, when the “consumer” is a litigation group under the guise of a proxy Plaintiff, which has packaged up hundreds of thousands (upon information and belief) of T.C.P.A. claims, there is an equitable basis, and an argument to be made for a corresponding entitlement to the adverse party who prevails, which is implied by the legislative enactment.

b.  C.R.C.P. Rule 11 provides that: The signature of an attorney constitutes a certificate by him that he has read the pleading; that to the best of his knowledge, information, and belief formed after reasonable inquiry, it is well grounded in fact and is warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law, and that it is not interposed for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation.

c.  UNDER C.R.S. 13-17-101, ET SEQ.: PART 1 FRIVOLOUS, GROUNDLESS, OR VEXATIOUS ACTIONS: The general assembly recognizes that courts of record of this state have become increasingly burdened with litigation which is straining the judicial system and interfering with the effective administration of civil justice. In response to this problem, the general assembly hereby sets forth provisions for the recovery of attorney fees in courts of record when the bringing or defense of an action, or part thereof (including any claim for exemplary damages), is determined to have been substantially frivolous, substantially groundless, or substantially vexatious. All courts shall liberally construe the provisions of this article to effectuate substantial justice and comply with the intent set forth in this section.

8.  Plaintiff, herein, is a Colorado corporation, formed, upon information and belief, for the exclusive purposes of aggregating T.C.P.A. / C.C.P.A. claims, as herein, and litigating such claims against unrelated Defendants, as a pretextual surrogate of the true parties in interest. As such surrogate, Lion Capital, L.L.C. is NOT a consumer within the meaning of the statute, nor an intended beneficiary of the C.C.P.A. Lion Capital, L.L.C. has embroiled Defendants MBA and Finney in this complex C.C.P.A. litigation, involving dozens of Defendants, when the ONE Exhibit attributable to MBA, Exhibit #8, is fully compliant with the C.C.P.A. For this reason, Defendants pray for attorneys fees under the provisions of the C.C.P.A.

9.  Lion Capital, L.L.C. is regarded as a shell corporation, upon information and belief, with the consequence that any award of attorneys’ fees or costs against Plaintiff will be meaningless, without a corresponding award of attorneys’ fees against Plaintiff’s counsel. Plaintiff’s counsel, Andrew L. Quiat, has distinguished himself as the “Dean” of T.C.P.A. / C.C.P.A. attorneys in Colorado, and beyond. As such, Attorney Quiat should be held to a high standard of knowledge of T.C.P.A. / C.C.P.A. provisions and recent rulings on such claims. Defendants MBA and Finney pray for an award of attorneys fees under the provisions of the C.C.P.A., because such claims against Defendants MBA and Finney are groundless, being based upon Plaintiff’s Exhibit #8, which upon its face is entirely C.C.P.A. compliant.

10.  The aspirations demonstrated by Plaintiff, to sever these claims from the true parties in interest, to aggregate them for procedural advantage, and to embroil unrelated Defendants in complex and cumbersome litigation, for the clear purpose of bulldozing Defendants into settlements favorable to Plaintiffs, is not, and should not be a permissible corporate purpose, under the Colorado Corporations Act. Defendants assert that such corporate conduct is ultra vires, and constitutes bad faith, with the complicity and endorsement, upon information and belief, of Plaintiff’s counsel, Andrew L. Quiat, Esq. Defendants MBA and Finney pray for an award of attorneys fees under C.R.C.P. Rule 11, against Lion Capital, L.L.C. and Andrew L. Quiat, Esq., because Mr. Quiat knew, or should have known, that the pleadings filed against MBA and Finney are not well-grounded in fact, are not warranted by existing law, and are interposed for the purpose of needlessly increasing MBA’s and Finney’s costs of litigation.

11.  Defendants MBA and Finney might have been sued in County Court, by the recipient of the fax (true party in interest), for an amount appropriate to that jurisdiction, and been able to litigate this matter with a reasonable amount of trouble and expense. Under such a scenario, Defendants might believe that the claim had been asserted in good faith, and that the policies and procedures of the Court would result in a just result. Defendants MBA and Finney pray for an award of attorneys fees under C.R.S. 13-17-101, because the claims asserted against them in this case have proven groundless (i.e. Exhibit #8 is C.C.P.A. compliant), frivolous (in that there is no basis for personal liability of Finney, who acted within his corporate capacity), and extremely vexatious, in that Plaintiff and Plaintiff’s counsel have alleged and claimed treble damages against MBA and Finney, with full knowledge that Fax.com and E-loansites employed a purported affiliation with the National Center for Missing and Exploited Children in order to enlist clients such as the Defendants in their fax-broadcasting services. There is documented evidence of such deceit by Fax.com and E-Loansites, and therefore no basis to believe that Defendants MBA or Finney intended to break any state or federal law. The C.C.P.A. does embody a “charitable exemption,” and Plaintiff and Plaintiff’s counsel knew full well (from parallel, concurrent litigation in Boulder District Court) that Defendants MBA and Finney acted in reliance upon such charitable sponsorship. Hence, the conduct of Plaintiff and Plaintiff’s attorney are precisely the conduct addressed by the Colorado legislature in the enactment of C.R.S. 13-17-101, et seq.

12.  The net impact of Lion Capital, L.L.C.’s strategy, upon Defendants MBA and Finney, herein, has been to take a single sheet (Exhibit 8 to Plaintiff’s COMPLAINT) of copy paper, 8 ½ “ x 11”, and turn it into thousands of pages of litigation, hundreds of hours of legal research, writing, consultation, and thousands of dollars of legal expense.

13.  Under any scenario that may ensue, herein, Defendants MBA and Finney have suffered incalculable harm to their business interests, inordinate legal expenses, and a betrayal of their trust in the legal process. The Defendants are litigating through a procedural quagmire, created by Plaintiff, and Plaintiff’s counsel, in the company of unrelated businesses and individual Defendants with whom they have no other commonalities

14.  The procedural strategies and litigation decisions made by Lion / Quiat, herein, have truly resulted in a “no-win” situation for all of the Defendants, regardless of the judicial outcome, herein. The strategies and choices of Plaintiff seem calculated to obtain that result, with the inescapable effect that Defendants are compelled to consider settlement, even of a claim without merit, in the interest of damage control.

15.  The conduct of Plaintiff, herein, and of Plaintiff’s counsel Mr. Quiat, and the calculated legal rationale behind such conduct constitutes an extortionate abuse of the judicial system. The sanction of an award of attorneys’ fees and costs is one of the few remedies available to balance the interests of the Parties.

PRAYER FOR RELIEF

WHEREFORE DEFENDANTS MBA AND FINNEY PRAY FOR THE FOLLOWING RELIEF:

* DISMISSAL OF THE CLAIMS OF PLAINTIFF, HEREIN, AGAINST DEFENDANT MBA, WITH PREJUDICE.

* DISMISSAL OF THE CLAIMS OF PLAINTIFF, HEREIN, AGAINST DEFENDANT FINNEY, WITH PREJUDICE.

* JUDGMENT AGAINST PLAINTIFF, FOR ATTORNEYS FEES AND COSTS, HEREIN.

* JUDGMENT AGAINST PLAINTIFF’S COUNSEL, ANDREW L. QUIAT, FOR ATTORNEYS FEES AND COSTS, HEREIN.

* ALL OTHER JUST AND REASONABLE RELIEF IN THE PREMISES.

Respectfully submitted,

This 6th day of August, 2004. ______

Timothy J. Essling, Attorney for

Defendants MBA and Finney

[In accordance with C.R.C.P. 121, 1-26(9) a printed copy of this document with original signatures is being maintained by the filing party and will be made available for inspection by other parties or the court upon request.]

CERTIFICATE OF MAILING:

I certify that a true copy of the foregoing MOTION TO DISMISS, with corresponding Brief, was duly e-filed and served by Courtlink addressed to the following:

Andrew L. Quiat, Esq.

8200 So. Quebec St., Suite A-3185

Englewood, CO 80112